While we love to zero in on the drama in D.C., the actual healthcare implications for Congress are modest. Most activity will be at the state level:Most notably, three conservative states (Idaho, Nebraska, and Utah) approved ballot initiatives to expand Medicaid – and as many as 300,000 more Americans will be covered as a result. This is a defining signal that the American public is moving towards accepting broader coverage.Two states – Kansas and Wisconsin – saw Democratic gubernatorial candidates who campaigned on Medicaid expansion as part of their platforms win in previously GOP-led states. And the new Democratic governor in Maine is set to implement the expansion that the Maine voters previously passed. Beyond more covered low-income individuals, expanded Medicaid also means lower bad debt for hospitals.One state, Montana, did reject its ballot initiative to continue its Medicaid expansion program through a tobacco tax, which will now lapse in July 2019 if the legislature does not act. Approximately 129,000 Montanans will lose coverage if the expansion ends. ‘Lastly, with a split Congress, the real action in Washington will be coming out of HHS, where Secretary Alex Azar and his team are moving full steam ahead on administration priorities.
Expect:Continued efforts to reduce Medicaid spending and aggressively encourage innovation through expanded state Medicaid and ACA waivers (including thefour waiver concepts announced today by Seema Verma)
Providing more choice for consumers outside the ACA market
Working to check off action items on the President’s Blueprint to Lower Drug Prices (including increased PBM scrutiny).
The process will continue over the next 12 months in regular steps of newly announced initiatives
An activist FDA continuing to speed generics and biosimilars to market to reduce costs to the consumer
Continued robust support for Medicare Advantage expansionExpanding value-based efforts, including return to mandatory bundled payment demonstrations (after former Secretary Price previously halted them), and shifting more risk to providers including through creative direct primary care models.
Indeed, federal healthcare agencies are wasting no time. Just days after the election, a generally highly regarded FDA Commissioner Scott Gottlieb took decisive action to reduce nicotine addiction by banning menthol cigarettes and restricting the sale of flavored e-cigarettes that are notoriously targeted to youth. And last week, Secretary Azar announced the Centers for Medicare & Medicaid Services (CMS) would soon allow states to apply for waivers to expand treatment capacity for serious mental health issues, which is currently handicapped by the outdated “IMD exclusion” that bans federal Medicaid funding for residential treatment facilities with more than 16 beds. Keep your eyes on Gottlieb, Azar, the Center for Medicare and Medicaid Innovation’s Adam Boehler and CMS’s Seema Verma for some of the most impactful changes in health delivery over the next two years. The real action is more with them than in the legislative arena.